Two Days Until TRID!

News on the Department of Financial Services Disclosure Rule & more

Dear Member,

I am writing this email while watching ESPN Game Day. I enjoy the stories about the various teams but my favorite part of Game Day is reading the signs that the fans have in the background. Some of them cannot be repeated in mixed company! I suspect that many of you have signs around your office expressing your opinion about TRID, CFPB and even the Washington lawmakers. But like Game Day, they may not be appropriate to share. So just stick to sending in your questions and comments to the CFPB Hotline at cfpbfaq@thefund.com or call 1-844-CFPB-FAQ.

As promised, this message is all about the new rule proposed by the Department of Financial Services ("DFS") that should go into effect sometime in October. This is the rule that we initially thought was all about correcting the disclosure of title premiums between the buyer and seller. Well, it does that but the rule has other requirements, too.

First, a reminder about the additional update all DoubleTime users should install DoubleTime 7.0.1. It will be released in early October for you to download so stay on the alert for the email announcement. This additional install will incorporate the ALTA settlement statements and the "Florida Insurance Premium Disclosure" form that is the focus of this email message.

Now for the new rule. When the Department of Financial Services became aware of the problem with the way the TRID rules require the disclosure of title insurance premiums, the fine folks in Tallahassee quickly concluded that there needed to be an easy way for Florida title agents to correct the disclosures to avoid being in violation of Florida law. The proposed rule requires that agents re-disclose the premiums for both the owners and lenders policies (of course) and includes a form, which I call the "comparison chart." If the agent fills in the comparison chart, they have complied with that part of the rule. It’s a simple chart with 4 columns to disclose the premiums as shown on the Closing Disclosure and the premiums as required under Florida law. The total under both "methods" is the same, of course; it is the allocation between the policies that is different.

IMPORTANT: the comparison chart is only required on TRID transactions. Not on cash or commercial transactions; just TRID transactions. Why? Because title premiums would never be disclosed the way TRID requires in any transaction to which TRID does not apply.

A copy of the proposed form that includes the comparison chart is available through this link.

The proposed rule also includes requirements for certifications by the buyer, seller and closing agent. The buyer/seller certifications contain representations that they have read the settlement statement, approve the charges and expenses shown, and acknowledge receipt of a copy of the form. The settlement agent certification contains a representation that the Settlement Agent has reviewed the settlement statement, the lender’s closing instructions and any and all forms related to the escrow funds and agrees to disburse in accordance with the terms of the transaction and Florida law.

These certifications and the requirement for signatures of the buyer, seller and settlement agent are required on ALL TRANSACTIONS in which title insurance will be issued (not just TRID transactions). The reason behind this part of the rule is the Department’s desire to have a clear enforcement case against an agent that inappropriately disburses closing funds. The industry is, of course, in favor of appropriate enforcement actions against title agents that monkey around with closing funds so we saw no reason to object to including this in the rule.

The form adopted as part of the rule includes the required certification and signature blocks. It is incorporated into DoubleTime 7.0.1. Look for "Florida Insurance Premium Disclosure" in the documents module. In a TRID transaction, DoubleTime will automatically populate the comparison chart with the correct numbers.

Summary:

• The rule will go into effect sometime in October, but the form with the comparison chart and certification language is incorporated into DoubleTime 7.0.1 so you can begin using it at any time.
• The requirement that the title premiums be re-disclosed in the comparison chart is only required for TRID- regulated transactions.
• The requirement for signature blocks with the prescribed language for buyer, seller and settlement agent apply to ALL transactions
• If the comparison chart is not applicable to your transaction, you can incorporate the signature blocks and certification language in whatever closing statement you use. These will be available in DoubleTime. Just remember that this language and the signatures are required for all transactions in which title insurance is issued.
• If the comparison chart is not applicable to your transaction, you can still use the promulgated form and just "X-out" the chart or fill in "N/A" in all of the blocks and then have the parties sign off on the certification language. You will sign as the settlement agent.

I hope you have found this to be helpful and, as always, thank you for your support of The Fund.

Best Regards,

Melissa Jay Murphy
Senior Vice President and
General Counsel